All limited companies in the United Kingdom are expected to pay certain taxes. If you own a company you could end up in trouble if you don't pay the right taxes, so read on to find out about the main types of tax you need to know about. Corporation tax is one of the main forms of tax that UK limited companies need to pay. You can normally use a self-assessment scheme to work out how much you need to pay based on your turnover and profits.
Your company will also need a Pay As You Earn (PAYE) system if you have employees. This is how your employees' income tax and national insurance contributions will be made, unless they are exempt from payments or don't earn enough to qualify to pay them. The aim of the PAYE system is to streamline the tax process by allowing deductions to be made directly from the paychecks of your company's employees on a monthly basis. A PAYE system is something most companies need to have.
Most employers will also have to pay national insurance contributions based on everything they pay their employees. This includes salary and any other benefits the employees might be receiving. Much of this contribution can also be calculated through the PAYE system at the same time as the rest of the calculations are made, but some of the contributions will be calculated and paid to Revenue and Customs at the end of the tax year, depending on circumstances and the particular employee benefits in question.
Your business will also probably have to pay local business rates, which go towards things such as maintenance of public areas. This helps to make sure your local environment remains clean and safe for your business to operate in. The local rates are determined by the local authority and the money is held in an account owned by the Department for Local Government before it is distributed back to the local area. You'll probably have to pay this if you have production, retail or office premises.
From time to time, UK limited companies might also have to pay other forms of tax depending on their circumstances and financial arrangements. One type of tax to be aware of when making purchases is VAT. If you sell any assets then capital gains tax is something else you might need to think about. It's a good idea to get financial advice if you are uncertain of your tax requirements so you can make sure you are paying everything you need to pay.
Your company will also need a Pay As You Earn (PAYE) system if you have employees. This is how your employees' income tax and national insurance contributions will be made, unless they are exempt from payments or don't earn enough to qualify to pay them. The aim of the PAYE system is to streamline the tax process by allowing deductions to be made directly from the paychecks of your company's employees on a monthly basis. A PAYE system is something most companies need to have.
Most employers will also have to pay national insurance contributions based on everything they pay their employees. This includes salary and any other benefits the employees might be receiving. Much of this contribution can also be calculated through the PAYE system at the same time as the rest of the calculations are made, but some of the contributions will be calculated and paid to Revenue and Customs at the end of the tax year, depending on circumstances and the particular employee benefits in question.
Your business will also probably have to pay local business rates, which go towards things such as maintenance of public areas. This helps to make sure your local environment remains clean and safe for your business to operate in. The local rates are determined by the local authority and the money is held in an account owned by the Department for Local Government before it is distributed back to the local area. You'll probably have to pay this if you have production, retail or office premises.
From time to time, UK limited companies might also have to pay other forms of tax depending on their circumstances and financial arrangements. One type of tax to be aware of when making purchases is VAT. If you sell any assets then capital gains tax is something else you might need to think about. It's a good idea to get financial advice if you are uncertain of your tax requirements so you can make sure you are paying everything you need to pay.